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Wednesday, March 29, 2006 

Vol. 2 No. 14

CAR Part II: Results and Recognition
Plus: Our Inaugural Podcast with ADESA’s Tom Kontos


The first full day of the Conference of Automotive Remarketing (CAR), kicked off with the two best guys on stage since Lewis & Martin: Sherb Brown, Vice President and Group Publisher of Bobit Business Media; and, Charlie Vogelheim, Vice President of Automotive Development at J.D. Power & Associates and definitely the car industry’s best MC in the business. Charlie emceed the event, and, as always, his skill as a host made the proceedings very entertaining as well as educational. Okay, so for those of you who don’t think of panels with subject headings like “Multiple Channel Usage at Finance Units” as particularly entertaining, you were not there to witness the panelists come up with spontaneous answers to Charlie’s question “what was the worst job you’ve ever had?….

The morning keynote was given by David Gartzke, Chairman, President & CEO of ADESA, the second largest physical auction group in the U.S. and the only “whole car” (non-salvage) publicly-traded auction company (NYSE: KAR). In an industry that, irrefutably, has many changes on the horizon, David is probably one of the leaders best positioned to move things forward in a positive way, and he set the stage for the rest of the day’s discussions and presentations. Panel presentations followed on remarketing trend developments for the manufacturer captive finance companies, with representatives from DaimlerChrysler, Ford, Nissan/Infiniti, Toyota/Lexus, and my old Philly friend , John Manchin from Subaru.

Next was a presentation on vehicle grading standards by David Munnikhuysen from Manheim. While this presentation was good and very straightforward, I’m still confused as to why a uniform system of grading a vehicle has not been adopted by the entire physical auction industry… I don’t think one can say “2, 3, 4” or “clean, fair, rough” is adequate across all auction “brands” (online & physical).


Online-Internet-Upstream Advances (IRBR panel) left to right: John Possumato, Vice Chairman, Driveitaway; Jeff Frimmersdorf, President, Auction 123.com; Kurt Biggar, VP Business Development, SGS; John Hoctor, Director, Corporate Development, American Auto Exchange; and Clive Kinross, Co-Founder and President, Onlane.





In any event, when I was asked to be on the “Online-Internet-Upstream Advances” panel with other Internet Remarketing Business Roundtable members, I jumped at the opportunity, even though I anticipated that, as this panel was scheduled right after lunch, would have a low attendance. Well, it was a full audience, which indicates to me that there’s keen interest in the mission of our new “pure play” online focused IRBR group and the activities we plan to promote to achieve greater dealer education and visibility to Web based activities. My fellow IRBR panel members did a good job of explaining why we all felt the creation of this new group was a necessity, and how our goal is to move things forward in positive way for all buyers and sellers online.

After the IRBR panel, Julie Andersen from Emercent Solutions presented the results of the third annual Remarketing Performance Study. Produced in conjunction with the International Automotive Remarketers Alliance, in a few short years it has become a staple of CAR and the results are beginning to reveal trends.

I was particularly gratified when I saw the slide below, which indicates that, for fleet lessors, the area that they plan to focus most on improving this coming year is advancing Client Driver/Employee Sales (a 16% response category). So for all you fleet lessors who want to improve your client's driver and employee sales, Driveitaway is at the ready....




Fleet Managers are most focused on improving sales to drivers and employees in 2006.










An Industry First:
A Commercial Fleet Upstream Remarketing Presentation with Performance Results


From a personal perspective, while it’s certainly an honor to be on a panel at one of these conferences, it’s far more rewarding to watch a client receive a “first in the industry” award, and know that your organization contributed in some small way to that success. I had the pleasure of this experience when Gage Wagoner, the Fleet Manager of Philips Medical Systems, presented the performance results of his upstream remarketing program that Driveitaway implemented for him under the LeasePlan reDrive brand. Gage presented his results at an afternoon panel, “Evaluating Upstream Progress and Impact.”.
Philips runs a fleet of 2,600 vehicles. By merchandising vehicles before they go off service, or are “grounded” to streaming channels, offering them first to drivers, then fellow employees, then a pool of many companies’ employees, and then to volume buyers, Gage’s company saved over $900 per vehicle in increased net realization per unit – and created a group of happy employee buyers who saved between $1,500-$2,000 on their car compared to retail prices. As used vehicles, these company cars are the best maintained, most desirable units in their category but for a long time were only offered to those employees who drove them. Our program, through LeasePlan’s reDrive brand, not only extends this purchase benefit through the entire employee base, but saves incredible money per unit for those companies who use this service. It’s a no-brainer, win/win for everyone, but, like any new innovation, the program has to break through the inertia of initiating change in an area of the industry where the remarketing process has literally remained unchanged since the time Zollie Frank invented corporate vehicle leasing some 50 years ago.


Charlie Vogelheim (left), VP of Automotive Development for J.D. Power & Associates, presented the inaugural “Upstream Remarketer of the Year” Award to Gage Wagoner (center), fleet manager for Philips Medical Systems. John Possumato (right), Vice Chairman for Driveitaway, represented his Company, who co- sponsored the award along with Bobit Business Media.



Eighteen months ago, it took courageous industry leaders and companies like Gage and Philips Medical, to break through the inertia and spearhead an upstream remarketing program, back when people in the commercial fleet industry still thought the term “upstream” had something to do with fish (and certainly wouldn’t experiment with something new in vehicle remarketing). Sad to say, in corporate America there are still many timid souls who are afraid to adopt upstream even today (with clear significant savings to the bottom line risk-free, and even in this age of continual “budget cuts” when annual savings in the six figures should mean something). But with demonstrated success stories like Philips, much more progress will be made in this area to the net benefit of both those companies who run fleets and their employees who will, for the first time, be able to purchase quality vehicles at the end of their term.

Kudos All Around

Consistent with the above, and, without a doubt the best part of this outstanding conference for me, was the awards presentation immediately following the last panel discussion, where Gage Wagoner, from Philips, won the very first “Upstream Remarketer of the Year Award.” Just the inaugural presentation of this award given alongside two other Bobit Media awards of “Consignor of the Year” and “Remarketer of the Year” spoke clearly as to the growth in significance of upstream remarketing in this industry in just a few short years. And there is no more deserving a recipient than Gage Wagoner representing Philips Medical Systems. Though I may be more than a little biased here, I can’t think of a more positive program instituted in corporate America or a more positive guy to spearhead it – Congratulations Gage, we are proud to work with and be associated with you…

And, of course, congratulations as well to my old friend, Dave Langley, Manager of Vehicle Remarketing for Honda Financial Services, who won the “Consignor of the Year” Award. Dave is a pioneer in this industry in his own right, having not only been one of the first to lead the manufacturers into the practice of upstream sales (ironically, if I’m not mistaken, paralleling Gage, Dave was the first a few years ago to display in a presentation the savings metrics that he had as manufacturer vehicle remarketer by going upstream online to his dealer body), but was also the most instrumental founder of the International Automotive Remarketers Alliance and served and guided it as its President during all its early formative years. Dave was also honored last year by the National Auto Auction Association with their Hall of Fame Award as well. It’s no exaggeration to say that Dave is one of the most well respected remarketers in the country today…once again, well done Dave and congratulations for an award well deserved.

Finally, congratulations to Larry Tribble, owner of Southern Auto Auction, winner of the “Remarketer of the Year” Award. Although I don’t know Larry personally, everyone in the business knows Larry by reputation, which, consistent with the other award winners, is marked by outstanding innovation and management expertise in this ever developing industry.

Well that closed out day #2 at CAR, and although I originally envisioned this CAR entry for the blog as no more than two parts, I still have a half a day to go at CAR, including our extra special, inaugural “Remarketing Advisory Panel” meeting, so I think this event merits one more entry before I finish up.

And Our Latest Feature…

So when we knew we had secured somebody as well spoken, and well-known as Tom Kontos is in the industry for our press briefing at CAR, we were motivated to move forward with the latest feature of my modest blog, our first-ever recorded podcast, so that you can experience listening to Tom in a conversational setting. So we are excited to add this first podcast to our missive, but I admit, it’s not as good as sitting there listening to the real thing, and I apologize in advance for my novice radio broadcast skills (I’m not Imus, or Howard Stern…Sirius radio will not be seeking me out), but hopefully it will whet your appetite for more information on this dynamic remarketing sector of the business, or to reach out to Tom directly, a very dynamic personality himself.

Next Entry: CAR…Part III (on Future Values, Extra Take-Home Dollars, and our inaugural Remarketing Advisory Panel Meeting)





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